Custom, Excise & Service Tax Tribunal
Principal Commissioner Cgst-Ujjain vs Texmo Pipes And Products Ltd on 9 January, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH- COURT NO. I
EXCISE APPEAL NO. 51106 OF 2020
[Arising out of Order-in-Original No. 04/Pr.COMMR/MS/CEX/UJN/2019-20 dated
03.03.2020 passed by the Principal Commissioner, CGST & Central Excise, Ujjain]
The Principal Commissioner ....Appellant
CGST & Central Excise,
29, Bharatpuri Administrative Area
Ujjain 0 456001 (M.P.)
Versus
M/s. Texmo Pipes and Products ....Respondent
Khasra No. 107, Bahadarpur Road, Burhanpur, M.P. - 450331 Appearance:
Shri Bhagwat Dayal, Authorized Representative for the appellant Shri Rohit Chaudhary and Ms. Preeti, Advocates for the respondents CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Date of Hearing: 06.01.2026 Date of Decision: 09.01.2026 FINAL ORDER NO. 50038/2026 JUSTICE DILIP GUPTA:
The department has filed this appeal to assail the order dated 03.03.2020 passed by the Principal Commissioner to the extent it holds that the respondent M/s. Texmo Pipes and Products Limited1 is entitled to take CENVAT credit of the service tax paid on the outward transportation of goods for the period 2013-14 to June 2017.
2. It needs to be that the Texmo Pipes had availed CENVAT credit of Rs. 73.30 lakhs for the aforesaid period in respect of service tax paid on transport of goods availed for outward transportation of goods on Free
1. Texmo Pipes 2 E/51106/2020 on Road2 destination basis from the factory gate of the respondent to the premises of the customers. It needs to be noted that Texmo Pipes had added the cost of transportation to the assessable value and paid the service tax.
3. The finding recorded by the Principal Commissioner on this issue is as follows:
"46. I find force in the contention of the noticee that they are adding the cost of transportation to the assessable value and then paying duty on the same is the biggest evidence and support of their claim that the goods are transferred only at the buyer's doorstep. If the place of removal is shifted back to the factory gate then there would be no requirement to include the cost of transportation in the assessable value. I also agree with their submission that their sale is on FOR basis, that is to say as per the terms of the contract between the buyer and the Noticee; the goods are to be delivered at buyer's doorstep. The invoices submitted by the noticee with reply shows that they have included the freight in the assessable value and paid duty thereon."
(emphasis supplied)
4. The Principal Commissioner thereafter relied on the Circular of the Board dated 08.06.2018 that refers to various decisions of the Supreme Court and held:
"In view of the above clarification of the Board's and the above said decisions of the Hon'ble the Supreme Court, I am of the considered opinion that the facts available on records are favoring the claim of the noticee hence they are entitle to take CENVAT credit of the service tax paid on the outward transportation. Held accordingly."
(emphasis supplied)
2. FOR 3 E/51106/2020
5. Shri Bhagwat Dayal, learned authorised representative appearing for the department, however, referred to the grounds of appeal and contended that the view taken by the Principal Commissioner is not correct.
6. Shri Rohit Chaudhary learned counsel appearing for the respondent assisted by Ms. Preeti, however, placed reliance upon a decision of this Tribunal in M/s. Mangalam Cement Ltd. vs. Commissioner, Central Goods, Excise & Service Tax, Udaipur3 to contend that the view taken by the Principal Commissioner on this issue is correct.
7. There is substance in this submission advanced by learned counsel for the respondent. A Division Bench of the Tribunal in Mangalam Cement held as follows:
"4. The appellant sells its final product to the customers on FOR destination basis and consequently remains responsible for getting the goods delivered till the premises of the buyer. The appellant bears the risk of loss while the goods are in transit and the property in the goods passes from the seller to the buyer and the sale takes place at the customers place. The appellant availed the services of goods transport agency for outward transportation of its final products from the factory to its depots/customer's premises and accordingly availed the CENVAT credit of service tax paid on such services.
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9. Ms. Sukriti Das learned counsel for the appellant assisted by Shri S.C. Vaidyanathan submitted that since the transportation of goods was on FOR destination basis, the premises of the buyers would be the place of
3. Excise Appeal No. 51444 of 2018 decided on 17.10.2025 4 E/51106/2020 removal and, therefore, CENVAT credit of service tax paid on goods and transport agency services for outward transportation of the finished goods up to the buyers place would be admissible in terms of rule 2 (l) of 2004 Credit Rules. In support of his contention, learned counsel place upon the Larger Bench decisions of the Tribunal in M/s NCL Industries Limited versus Commissioner of customs and Central Tax (2021 (5) TMI 458 - Andhra Pradesh High Court) and M/s Sweety Industries versus Commissioner of CGST & Central Excise, Vadodara (Excise Appeal No. 12738 of 2018 dated 14.02.2024). Learned counsel for the appellant also placed reliance upon a Division Bench decision of this Tribunal in M/s Prism Johnson Ltd. (Unit-II) (formerly M/s Prism Cement Ltd.) versus Commissioner of Central GST, Central Excise & Customs, Jabalpur (2024 (6) TMI 612 - CESTAT NEW DELHI), which placed reliance on the aforesaid two Larger Bench decisions of the Tribunal.
10. Shri Bhagwat Dayal, learned authorized representative appearing for the department, however, supported the impugned orders and submitted that they do not call for any interference in these appeals.
11. The admissibility of CENVAT credit of service tax paid on goods transport agency availed for outward transportation of goods on FOR destination basis has been upheld in M/s Prism Johnson Ltd. It also needs to be noted that in the own case of the appellant for the subsequent period from July 2014 to March 2015 as well as for the previous period from October 2011 to March 2012 this precise issue was decided in favour of the appellant by this Tribunal by orders dated 09.11.2017. These two decisions are (i) : M/s Manglam Cement Ltd. versus CCE & ST, Udaipur (Excise Appeal No. 50561 of 2017 decided on 09.11.2017) and (ii) M/s Mangalam Cement Ltd. versus CCE & ST, Jaipur - I (2017 (12) TMI 81 - CESTAT New Delhi). These two decisions were assailed before the High Court by the 5 E/51106/2020 Department, but the appeals were dismissed by the High Court on the ground of monetary limit.
12. In view of the aforesaid, it is not possible to sustain the orders impugned in the four appeals. Accordingly, they are set aside and all the four appeals are allowed."
(emphasis supplied)
8. In view of the aforesaid decision of the Tribunal in Mangalam Cement it has to be held that the Principal Commissioner committed no illegality in holding that the respondent was entitled to take CENVAT credit of Rs. 73.30 lakhs of the service tax paid on outward transportation of goods to the customs premises.
9. The appeal filed by the department is, accordingly, dismissed.
(Order Pronounced on 09.01.2026) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) Jyoti